Brewbound Session Data Experts Define Where Craft Has Room to Grow

As he stood onstage at the Revere Hotel last week, Tom Fox had to get something off his chest. Fox, a partner at CM Profit Group, a market research firm, doesn’t believe in what he thinks is a widespread perspective of stats guys like himself.

“There is a perception that data is manipulated and spun,” he said.

Fox used his presentation at the Brewbound Session in Boston on Thursday to debunk this perception and explain the importance of market research in the increasingly competitive craft beer industry.

As new craft beer brands launch and existing ones continue to develop their products, brands and footprints, Fox said that understanding data can help brewers to expose untapped markets, to stay objective, fact-based and solution-oriented, and to separate themselves from the less-informed majority. Along with delving into these numbers, he suggested that every brewer consistently ask retailers a set of questions to set the background for the data, such as:

How is craft beer doing at your store?

Where do you want to see the craft beer segment in the next three to five years?

What is your goal with craft beer?

The combination of those responses with some numbers — like those provided at the event by Nielsen’s Liz Crews, the vice president analytic lead for beverage alcohol practice — could help a brand improve its performance, according to Fox.

When breaking down the data, Crews noted that even after gaining a 24.4 percent increase in dollar sales in convenience stores compared to the previous year, craft beer still possesses just a 2 percent dollar share of beer in convenience stores. Similarly unbalanced, craft beer gained 17 percent in dollar sales in drug stores compared to the previous year, yet it possesses only a 3 percent dollar share of beer in these stores. And despite gaining 22.1 percent in dollar sales compared to the previous year in value stores and all other retailers, such as Walmart, Target, BJ’s, Sam’s Club and Dollar Stores, craft beer possesses a 4 percent dollar share of beer in those stores. Crews said that those classes of retailers, which have national footprints, enormous facilities, significant inventory and shelf space, and considerable advertising abilities, are only starting to understand the consumer appeal of craft beer. It could be a race to the shelves.

Nielsen conducted a survey that identified where consumers buy their craft beer. Crews noted that 65 percent of responses said that they buy craft beer at the grocery store, 44 percent said the liquor store, 31 percent said at restaurants, 24 percent said at bars, 17 percent said at warehouse and club stores, 10 percent said at convenience stores, another 10 percent said at natural and specialty grocery stores, 9 percent said directly from the brewery, 6 percent said from a sporting or public event, 1 percent said online and 8 percent said “other.”

Crews said that craft beer shoppers are more impulsive that mainstream beer shoppers, as well as less likely to plan their purchases, and more engaged with in-store promotions. Adding to these impulsive tendencies, Crews said that of all beer shoppers, craft beer shoppers showed the least intent to buy a specific brand on a trip to the store.

Craft beer also could do a much better job at diversifying its consumer demographic, Crews said. Nielsen data found that 85.6 percent of craft’s volume sold derives from white people, 2.7 percent of craft’s volume sold derives from black people, 6.7 percent from Hispanics, 3 percent from Asian people and 2 percent from other racial backgrounds.

Crews believes that by reaching more Hispanics and women, furthering in-store engagement and diversifying channels, among other potential catalysts, craft beer shouldn’t see anything less than double-digit growth figures any time soon.